Ch 10: Assignment - The Basics of Capital Budgeting: Evaluating Cash Flows consiaer tne case or rree spirit inaustries inc.: Free Spirit Industries Inc. is considering investing $600,000 in a project that is expected to generate the following net cash flows: Free Spirit uses a WACC of 10% when evaluating proposed capital budgeting projects. Based on these cash flows, determine this project's PI (rounded to four decimal places). 2.3072 1.9776 2.1973 1.7578 Free Spirit's decision to accept or reject this project is independent of its decisions on other projects. Based on the project's PI, the firm should the project. By comparison, the net present value (NPV) of this project is in the project because the project . On the basis of this evaluation criterion, Free Spirit should increase the firm's value. When a project has a PI greater than 1.00 , it will exhibit an NPV ; when it has a PI of 1.00 , it will have an NPV equal to $0. Projects with PIs 1.00 will exhibit negative NPVs